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Delay Container-Scanning Rule Two Years? Not Good Enough, Importers Say

U.S. importers have bought themselves another two years before they must implement a container-scanning rule that they believe should be scrapped altogether.

Mandated by the SAFE Port Act of 2006, the Department of Homeland Security issued a requirement that 100 percent of U.S.-bound ocean containers be scanned at the foreign port of origin. Since then, Congress and DHS have been kicking the can down the road, repeatedly delaying implementation of a rule that industry says is unworkable. The latest move puts off action until 2016.

But that’s not good enough for scores of industry associations representing everything from agricultural products to footwear, cookware, alcoholic beverages, chemicals, toys, explosives, Halloween costumes and turkeys. (Joining them were groups representing freight forwarders and customs brokers.) In a June 2 letter to Homeland Security Secretary Jeh Johnson, they called for repeal of the mandate, along with a new focus on “practical supply chain security solutions.”

If implemented, the groups said, the scanning rule “would have a significantly negative impact on global commerce and cause significant conflict with the governments of our foreign trading partners, many of which have stated their opposition to the requirement previously.”

(Photo credit: Glyn Lowe Photoworks)

The rule, they said, raises a number of unanswered (if unanswerable) questions. How does DHS define the word “scanned”? Does it refer simply to taking an image of a container, or must authorities also analyze that image and determine whether the box merits further inspection? What standards would the scanning technology have to meet? Who would pay for purchasing, operating, maintaining and monitoring the equipment? What protocols would be followed at foreign ports?

From a diplomacy standpoint, what difficulties might U.S. inspectors face in obtaining permission from foreign ports and governments to carry out the scans? And how would the U.S. react if a foreign government turned the tables and insisted that its containerized imports from the U.S. be scanned here?

Finally, what resources would be required to scan and analyze every one of the 10-plus million ocean containers that enter the U.S. each year?

With both Congress and DHS backpedaling on the rule, importers faced little risk of having it implemented this year. For one thing, “the technology just is not there,” said Jonathan Gold, vice president of supply chain and customs policy with the National Retail Federation. (DHS reportedly expects to conclude a review of the applicable technology by the end of this year.) What’s more, the original legislation mandating the rule failed to identify who would pay for setting up and maintaining the entire system.

Over the years, U.S. Customs and Border Protection has sought to extend its control over imports further up the supply chain. In 2002, it issued a rule requiring that importers electronically file manifest information 24 hours prior to a vessel departing the foreign port of origin. In 2008, it bumped up the requirement to include 10 additional data elements related to the importer’s security filings, and two from the carrier.

The 24-hour rule and its successor were largely accepted by the trading community without complaint, but they did not involve the approval of a foreign government, or on-site inspection personnel, that come with the container-scanning requirement. “It’s a different scenario, having to scan a container before it’s put on the vessel,” said Gold.

CBP already has the Container Security Initiative, put into place after 9/11, which pre-screens containers at point of origin and identifies high-risk shipments at 58 ports around the world. Only then does it lead to physical scanning or inspection. “That wouldn’t work for 100-percent screening,” said Gold.

He said a viable means for ensuring container security and safety has to involve the international community. “We can’t just do this as a U.S.-only solution. It has to work for the rest of the world, and our trading partners have pointed this out.”

In any case, he said, a workable plan will not involve 100-percent scanning. DHS should focus instead on isolating those containers that constitute the biggest potential threat, whether because of their country of origin, items within, or parties involved in the shipment. The ultimate solution lies in a “layered defense,” he said.

Enough of the postponements, importers say. “We fully support your waiver,” said the industry groups in their letter to Secretary Johnson. “However, instead of going through this exercise every two years, we urge you and the Administration to recommend to the Congress that the statutory 100% container scanning requirement be repealed.”

Despite strong objections from industry, the rule remains on the books for now. Only Congress has the power to repeal it. Gold called on the Obama Administration to push lawmakers in that direction. Yet he doubts the President has the will or political capital to make it happen. “With Congress today,” he said, “everything’s in gridlock.”

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